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SigmaRoc agrees £15m CCP takeover

11 Dec 18 SigmaRoc, the new mini conglomerate seeking to consolidate the building materials sector, has struck a deal to buy Lancashire’s CCP.

CCP assets include the former Marshalls concrete block production plant in Wrexham
CCP assets include the former Marshalls concrete block production plant in Wrexham

AIM-listed SigmaRoc was established in 2016 by an ex-Holcim team with the strategy of buying niche building materials companies to develop a group, much like Breedon has done. Its first acquisition was Ronez, a Channel Islands quarrying and concrete business bought from LafargeHolcim for £45m in December 2016. A year later it paid £12m for Topcrete and Allen Concrete and then another £10m for Poundfield.

Its latest target is CCP (formerly Cheshire Concrete Products), an integrated concrete products and quarrying group with four production sites and a trading business in the northwest of England. It began as a management buyout from Pochin plc in 2005.

SigmaRoc has conditionally agreed to acquire CCP for an initial consideration of £15.21m in cash, to be satisfied by a drawdown of its Santander credit facility and a proposed vendor consideration placing of new SigmaRoc ordinary shares.

In the 12 months to 31st August 2018, revenue at CCP was £20.9m and adjusted Ebitda was £2.6m.

CCP's founding management team, led by managing director Shaun Gray, will remain with the business.

SigmaRoc said that if the deal did not complete by 31st January 2019, it would be scrapped.

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CCP owns a limestone quarry in Aberdo, the former Marshalls Llay block production site near Wrexham, the former Pochin’s block production site in Middlewich and a wet press facility in Bury.

SigmaRoc chairman David Barrett said: "We are about to close out a year of significant further development of the group. The acquisitions made in 2017 are performing very well. We expect CCP will be an excellent addition to the group, value accretive for shareholders and the right next step overall."

Chief executive Max Vermorken added: "Invest, Improve, Integrate – it is a strategy which is already delivering strong results and will continue to do so. CCP will be a great fit in our journey, immediately accretive and a truly excellent addition to the group. CCP's management team will continue to drive its performance and continue the growth of an already very impressive business."

City analysts appear to like the deal. "Paying just 5.63x trailing EV/Ebitda for assets that complement the existing footprint and have a 20% regional market share, we believe SigmaRoc have once again negotiated well for a good business," said Berenberg.

"With a modern asset base, a strong market presence (20% market share in the northwest) and a complementary footprint with the group’s existing precast platform in the southeast of the UK, SigmaRoc appears well placed to drive further growth in these assets," it added.

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